Auto parts makers back move to ban imports of RHD cars

The Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) expressed yesterday their support to Customs Commissioner Alberto Lina’s move to ban the importation of imported right-hand drive vehicles.

The MVMAP agreed that converted right-hand drive vehicles are usually non-compliant with Philippine safety standards.

The imported second-hand vehicles, the MVPMAP likewise noted, do not follow Philippine environmental standards and may thus have an adverse impact on the environment.

Furthermore, the MVPMAP pointed out that the condition of most vehicles in the Philippines are beginning to deteriorate and most imported used vehicles are in their end-of-life stage.

By patronizing imported used or second-hand vehicles, the MVPMAP said, there is loss of employment in the domestic automotive industry and local vehicle sales drop, resulting in the lowest sales output in the ASEAN region.

Since most of the imported vehicles are undervalued, the government loses substantial revenue.

There are currently 525 automotive firms of which 14 manufacture/assemble passenger car, while 20 manufacture/assemble commercial vehicles.

There are seven motorcycle manufacturers/assemblers and 256 parts and components manufacturers, while there are 228 vehicle dealers.

Total investment in the automotive industry amounts to P68 billion of which P40 billion has been spent on assembly plants and P28 billion on parts manufacturing.

The automotive industry provided employment in 2002 to 77,000 workers.

Exports of parts and components alone amounted to $1.74 billion in 2004 and for this year is projected to reach $1.9 billion.

The MVPMAP pointed out that if second-hand right-hand vehicle importations is stopped, locally assembled vehicles would be promoted.

There would be an increase in local vehicle sales which over a period time would increase locally assembled second-hand vehicles and would increase the demand for replacement parts. This would improve the production volume of parts manufacturing, thus addressing the current issue of absence of economies of scale.